Using ChatGPT To Make Better Decisions

Decision Making And Problem Solving
Using
Decisions ChatGPT to Make Better
by Viktor Mayer-Schönberger
August 24, 2023
Jorg Greuel/Getty Images
Summary. A successful decision-making process has three steps: Framing the

decision, generating alternatives, and deciding between them. Large language
models can help at each stage of the process. But while it may be tempting to
merely ask ChatGPT for answers,... more
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Can ChatGPT help executives make better decisions? The large
language model everyone has been talking about for months also
has an eloquent answer to this question: “Yes, I can support you in
management decisions by providing information, facts, analysis,
and perspectives that can help you make an informed decision.”
ChatGPT immediately follows up with a limitation of its own
competence. “However, it is important to note that my advice and
recommendations are based on an algorithmic analysis of data
and information, and you, as a human being, still have to make
the final decision based on your experience, knowledge, and
assessment of the situation.”
Fair enough. But despite this dose of modesty — or because of it

— large language models like ChatGPT can become powerful
decision-making tools for managers and for companies. Their
promise isn’t in providing us answers, but in helping us go
through a more systematic decision-making process than is often
the case today, even with important management decisions.
Three phases characterize well-informed decisions. First, we must

define our goals and context. What exactly is the decision about,
and based on which goals, values, and preferences? This way, we
define the decision-making problem and set the decision-making
framework. The second step is to develop choices: What decision-
making options are available to us? The goal here is to generate
many different alternatives and not, as is all too often the case, to
focus just on the obvious options. Only when we have developed
sufficient options from the decision-making framework can we
evaluate them and make a well-informed decision in a third step.
Used skillfully, ChatGPT can already provide valuable services in

all three phases for business decisions in its current training state.
In practice, this means we can enter into a dialogue with the
system on any of the three phases of a well-informed decision-
making system. When evaluating decision-making alternatives,
we can ask, for example: What mistakes do managing directors of
large, medium-sized companies in mechanical engineering make
when they decide to expand into new markets? And what were the
success criteria for a successful expansion?
ChatGPT then does not provide us with a template with which we

can weigh the options perfectly in our case. But it can help us
uncover our own biases and challenge preconceived notions.
Using ChatGPT cleverly can be like a de-biasing tool that has
seemingly read Daniel Kahneman and Amos Tversky
intensively. It thus offers food for thought to better reflect on how
we can evaluate the options in a more well-informed way.
The system is already even more valuable today when it is

employed to work out additional options that we can not think of
or easily come up with. This way, it broadens our decision-making
horizons, and we understand that there are many more and more
far-reaching decision-making options than we realize.
How do we reduce our dependence on China and diversify a

supply chain? A managing director and his team may never have
dealt with this decision-making question before. ChatGPT,
however, may be able to offer up many of the strategies
documented on the internet by companies in a comparable
situation and may come up with more original ideas than simply
relocating production to Vietnam. This is because the system has
access to a part of the publicly available treasure trove of options
in the industry or company class.
Large language models can also help set goals and preferences,
evaluate the decision-making circumstances, and select the
decision-making framework. Again, dialogue is key. With the
right questions, we become the interlocutor to better understand
the context of a decision. For example, with ChatGPT, we can
quickly see suggestions of what typical goals other
companies might have had in mind in a comparable decision-
making situation. For example, a prompt might look like this: “Hi
ChatGPT, I am the head of a successful, mid-sized tooling
manufacturer outside Columbus, Ohio. I am having difficulties
attracting new talent, especially engineers. What may be the
reasons for this? What strategies are similar manufacturing
companies employing to cope with the talent shortage?”
The bottom line is: ChatGPT is becoming an increasingly

intelligent conversation and sparring partner. It does not relieve
us of defining the decision-making framework, working out a
wide range of options, and evaluating them. However — and here,
the self-assessment from the beginning of this article is correct —
it does provide interesting perspectives. A large language model
has several advantages compared to a human sparring partner: It
does not pursue its own interests and does not want to please the
top decision-maker, for example, to promote its own career. It is
not subject to internal group thinking and bureaucratic politics
and is also much cheaper than external management consultants
or internal strategy departments. This also means that ChatGPT
may make the preparation and assistance of decisions for smaller
companies cheaper, leveling the playing field.
The future of case studies

Budding managers at business schools are already indirectly
learning about decision-making through a large number of case
studies. The aim is to acquire a repertoire of decision-making
models by developing and evaluating possible options for action
within a decision-making framework. Of course, case studies do
not contain a solution in the form of a perfect answer to a specific
decision-making situation. In case studies, questions are raised,
decision-making frameworks are presented, and decision-making
options are outlined. Not only can prospective managers learn
from and with these case studies, but they can also be used to
train large language models. However, this has not yet happened.
ChatGPT’s programmers could only feed their model a fraction of
publicly available case studies. The real treasure trove of data is
exclusive and stored at the major providers such as Harvard
Business Publishing (HBR’s parent company), with over 50,000
case studies or the non-profit Case Center. If the custodians of
these business case studies team up with the makers of large
language models, a language assistant for programming,
copywriting, and customer inquiries could turn into a powerful
decision-making assistant for companies.
This will also get easier in the future because the learning
algorithms are becoming more and more efficient, and thus
“medium-sized language models” will also be possible, in which it
is no longer necessary to feed half the Internet and entire
libraries, but above all the texts and documents relevant to the
specific field. It is only a matter of time before this happens. In
any case, the economic incentive for more informed business
decisions is excellent and will propel the transition from today’s
ChatGPT to an even more powerful future we might dub
“DecisionGPT.”
The great strength of ChatGPT and similar systems is to compare

and contrast similar situations. This is precisely the most
important need in many management decisions. Very few of the
decisions managers face are unique. Thousands, sometimes even
millions, of managers before them have had to make a similar
choice. The better it is described in human language how they set
the decision-making framework, weigh the options, and make
their decision, the easier it is for DecisionGPT to become a
powerful tool for more informed decision-making.
Eventually, many such management decisions could be

automated. Robo-managers could be deployed sooner and more
often than many executives in their corner offices may believe
today.
In the meantime, though, the advantage will go to managers who
use currently available tools to improve their decision-making
process. Don’t ask models like ChatGPT for answers; probe them
to each stage of the decision-making process.
VM
Viktor Mayer-Schönberger is professor at
Oxford. His new book with Thomas
Ramge, Reinventing Capitalism in the Age of Big
Data, is being published by Basic Books in
February.
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Decision Making And Problem Solving

Jorg Greuel/Getty Images

Summary. A successful decision-making process has three steps: Framing the

Fair enough. But despite this dose of modesty — or because of it

Three phases characterize well-informed decisions. First, we must

Used skillfully, ChatGPT can already provide valuable services in

ChatGPT then does not provide us with a template with which we

The system is already even more valuable today when it is

How do we reduce our dependence on China and diversify a

The bottom line is: ChatGPT is becoming an increasingly

The future of case studies

The great strength of ChatGPT and similar systems is to compare

Eventually, many such management decisions could be

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